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Political, financial and economic risk grades for the UAE Federation stay unaltered at the highest level in GSN's latest Risk Management Report, reflecting the overall stability of the polity. In recent developments, Abu Dhabi, in the role of ‘Little Sparta’, has driven the UAE’s activist regional policy from East Africa to the Yemeni island of Socotra while retrenching in Libya and other conflict zones. Rapprochement with Israel has continued and relations with Qatar remain uneasy, despite the Gulf Co-operation Council ending the 40-month boycott.

GSN maintains Qatar’s B1 risk grade with a positive momentum for political risk in its most recent Risk Management Report. It still has many critics, but Qatar is finalising plans for the Fifa World Cup. The Arab Cup, won by Algeria in December, provided a successful test run of facilities. An expensive PR machine will argue that the Al-Thani-dominated emirate has considerably improved workers’ rights and created a more inclusive political system. Qatar’s global standing benefited from its central role in the Afghanistan drama

Political rapprochement between GCC rivals, along with rich pickings from high oil prices and a successful coronavirus vaccine rollout meant the past year has been a relatively benign one for those outside the region’s conflict zones, according to GSN’s annual survey of developments across the region. In this special issue, we present refreshed Risk Management Reports for each of the nine countries in the region (as well as the Kurdistan region and individual UAE emirates) and some big picture analysis to complement GSN’s usual detailed focus on the minutiae of political and business life.

Yemen remains on GSN's worst grades for both political and financial risk in this latest Risk Management Report. The United Nations is continuing peace efforts, led by special envoy Hans Grundberg, but any lasting peace remains elusive, with the potential for wider regional conflict to flare up again and factions entrenched in their fiefs. In January, the UAE condemned the seizure by Houthi forces of  a UAE-flagged ship in the Red Sea while it was en route from Socotra to the Saudi port of Jizan as an act of piracy. The Paris Club group of international creditors has extended the debt service suspension initiative (DSSI) programme, covering debt due up to end 2021.

Iran has not changed its D5 risk grade with negative momentum for political risk in its latest GSN Risk Management Report. Talks to revive the 2015 JCPOA nuclear deal between Iran and world powers continued behind closed doors in early 2022, with Tehran insisting that all sanctions are removed. President Ebrahim Raisi increased spending plans in his first budget based on expectations of economic growth. Further talks with Saudi Arabia are expected.

In GSN's most recent Risk Management Report, Iraq's D4 risk grade with negative momentum for the economic and financial outlook  remains unchanged as politicians in Baghdad continue to argue over the formation of a new government. Political violence and the influence of Iran-backed militias remains a problem. The heavily oil-dependent economy performed better in 2021 thanks to increased global prices.

GSN Risk Grade: D↓4 Recent developments Election results: The Kurdish Democratic Party (KDP) cemented its position as the main Kurdish political force at the 10 October general election, winning 33 seats, up from 25 in 2018.

Regional institutions and developments Arab League: The UAE has called for Syria to be brought back into the League of Arab  States, a decade on from the start of the civil war which has ravaged the country and led to the Assad regime’s suspension from the pan-Arab body in November 2011.

Arab/Islamic and other financial institutions Low spreads for Apicorp bond: The Dammam-based Arab Petroleum Investments Corporation (Apicorp) in February raised a $750m bond, which despite record low spreads and yield was 2.5-times over-subscribed.

Risk Management Report – GSN Risk Grade – Abu Dhabi A1, Dubai A2↓ Overview Politics: At the top of each emirate are the rulers’ courts and their crown princes. In practice, only the rulers of Abu Dhabi and Dubai make unilateral decisions and issue emiri decrees; most of the smaller emirates use legislation crafted at federal level.

Risk Management Report – GSN Risk Grade – A1 Overview Politics: Established in 1971, the federation of seven emirates – Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al-Khaimah, Sharjah and Umm Al-Quwain is economically liberal and progressive, but remains politically conservative.

Fiscal squeeze: The government deficit increased by 98% in H1 2020 compared to the same period last year, as a result of the slump in oil prices and the coronavirus lockdown. Revenues fell 29% year-on-year to BD910m ($2.4bn) while expenditure was up 2% to BD1.7bn, leading to a deficit of BD798m.

Nuclear visit: International Atomic Energy Agency (IAEA) secretary-general Rafael Mariano Grossi visited Iran on 24 August to discuss outstanding questions related to nuclear safeguards. After what was described in a joint statement as “intensive bilateral consultations”, Iran agreed to give IAEA inspectors access to two sites thought to have been used for covert nuclear activities – one near Karaj to the west of Tehran and another near Isfahan in the centre – and to facilitate the UN agency’s verification activities.

IsDB mobilises $2.3bn Covid-19 package: The Islamic Development Bank Group has put together a $2.3bn Strategic Preparedness and Response Programme for Covid-19, under its “3Rs approach [of] respond, restore and restart”. $1.52bn will be funded from the Jeddah-based IsDB's ordinary capital resources, mainly from a reallocation of committed resources to mitigate Covid-related risks in the 47 OIC member economies.

Politics: Sultan Haitham Bin Tariq Bin Taimur Al-Said was named ruler in January 2020, succeeding the late Qaboos Bin Said Al-Said as the 15th ruler of the Al-Busaidi dynasty (founded in 1750). Qaboos was a monumental figure who, having deposed his father in 1970, had led Oman since 1970. The succession process was quick and smooth, orchestrated via the Royal Family Council. Haitham has moved cautiously in the opening period of his rule, broadly following his predecessor’s domestic and regional policies.